In the choice between the two routes to a truly international monetary system, Hayek in 1937 expressed a preference for an international central bank over international free banking. This is surprising given the outlook on economic policy for which he was well known, a classical liberal appreciation for the profound limitations of government activism.
The language Hayek used is even more surprising in light of his more recent (1973, 1988) critiques of “constructivist rationalism” in social thought. In the 1937 lectures, he spoke of “the ideal” of “a rationally regulated world monetary system,” and commented that “a really rational monetary policy could be carried out only by an international monetary authority, or at any rate by the closest cooperation of the national authorities and with the common aim of making the circulation of each country behave as nearly as possible as if it were part of an intelligently regulated international system.”
—Lawrence H. White, “Monetary Nationalism Reconsidered,” in Money and the Nation State: The Financial Revolution, Government and the World Monetary System, ed. Kevin Dowd and Richard H. Timberlake Jr. (New Brunswick, NJ: Transaction Publishers, 1998), 379.
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